November 07, 2008

Will The Recession Help TV?

We conclude "Recession Week" today with two guest posts. The first is by Susan Bandura.

Now that even The Wall Street Journal has admitted we are in a recession, everyone has run amok with dire predictions about marketing and advertising.

The online world remains relatively upbeat, knowing that the Internet is still attracting plenty of viewers, and that online advertising is way cheaper than more traditional media.

But most pundits are saying that TV advertising is more vulnerable than ever – that companies are going to cut their TV advertising budgets, that DVR penetration is going to help put the nail in the coffin.

But what’s really going to happen to TV viewing in the near future?

Let’s see … everybody has a TV … people are staying at home more … consumption of entertainment usually goes up when the economy is down… and now it's dark by the time we get home from work...

All of these factors say “more TV watching” as far as I’m concerned. Which means that TV advertising will make as much – if not more – sense than ever.

In A Recession, Protect Your Customers

Today's second guest post is by James Hipkin.

Retaining customers is always important. But, in a recession, it is vital.

The tendency when times are tough is to focus on acquisition. Acquisition is important. But focusing on customer retention is less expensive and will have a greater short-term impact on your business. Small increases in loyalty (or attrition) will have significant impact on your bottom line.

Retained customers have the following benefits over newly acquired customers.:

You don't need to bribe them. They have paid full price in the past and are prepared to continue to do so. They are loyal because they see value in your products or services.

They are more likely to respond to up-sell and cross-sell offers. Because they have a relationship with your brand, they are easier to convert.

They cost less to service. They know how your products work and don't need to contact customer service or sales as frequently.

They can be advocates for your products. Especially when times are tough, consumers want to make purchase decisions with confidence. Nothing builds confidence like a personal recommendation from a peer they trust.

Keeping customers loyal is the most efficient marketing activity you can pursue. This is especially true for the category heavy users who are your best customers. As Sharon Krinsky explained in her piece Good Strategy For Bad Times, advertising should be designed to appeal to high yield customers.

Your smartest competitors will be targeting your best customers. You need to protect them. For specific ideas on how to do this, click here.

Remember, no matter how well you do everything else, you can't make money without customers.

James is director of Link, the digital and direct response arm of Hoffman/Lewis. You can reach him at jhipkin@linksf.com

Susan is director of strategic planning at Hoffman/Lewis. You can reach her at sbandura@hoffmanlewis.com.

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Ad Contrarian Says:

"Shakespeare was a storyteller. You're a copywriter.""Good ads appeal to us as consumers. Great ads appeal to us as humans."

"Social Media: Tens of millions of disagreeable people looking to make trouble."

"As an ad medium, the web is a much better yellow pages and a much worse television."

"Sometimes success in the advertising business requires sitting quietly and letting clients proceed with their hysterical delusions."

"Marketers prefer precise answers that are wrong to imprecise answers that are right."

"Brand studies last for months, cost hundreds of thousands of dollars, and generally have less impact on business than cleaning the drapes."

"The idea that the same consumer who was frantically clicking her TV remote to escape from advertising was going to merrily click her mouse to interact with it is going to go down as one of the great advertising delusions of all time."

"Nobody really knows what "creativity" is. Every year thousands of people take a pilgrimage to find out. This involves flying to Cannes, snorting cocaine, and having sex with smokers."

"Marketers habitually overestimate the attraction of new things and underestimate the power of traditional consumer behavior."

"We don’t get them to try our product by convincing them to love our brand. We get them to love our brand by convincing them to try our product."

"In American business, there is nothing stupider than the previous generation of management."

"If the message is right, who cares what screen people see it on? If the message is wrong, what difference does it make?"

"The only form of product information on the planet less trustworthy than advertising is the shrill ravings of web maniacs."

"There's no bigger sucker than a gullible marketer convinced he's missing a trend."

"All ad campaigns are branding campaigns. Whether you intend it to be a branding campaign is irrelevant. It will create an impression of your brand regardless of your intent."

"Nobody ever got famous predicting that things would stay pretty much the same."